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Bang & Olufsen announces preliminary financial results for the third quarter

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Jeff
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Jeff posted on Tue, Mar 26 2019 4:10 PM

Submitted without comment, for now:

B&O Report

“The results we have delivered in the third quarter are clearly not
satisfactory. We have overestimated the speed at which we have been able to
drive the change towards a more retail-led and demand driven sales and
distribution network. Combined with the unexpected decline in TV revenue in
the quarter, this has led us to reassess our outlook for the year,” says CEO Henrik Clausen.

Jeff

I'm afraid I'm recovering from the BeoVirus. Sad

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seethroughyou
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I completely agree with Jeff above. 

 

A B&O TV was perhaps 2-4 times the cost of a good Sony or Panasonic in the 80s and 90s. You paid the price because it was just in reach and the integration, reliability and functionality was worth it. B&O TVs now cost 10 times. By raising prices to Oligarch levels, they lost their working and middle income folk - what a disastrous strategy. 


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Duels
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Duels replied on Wed, Mar 27 2019 8:49 AM
Dante:

Some months ago I read an interesting article explaining Bose's market positining. I felt that it pretty much summarizes B&O too: decent sound, but not premium, although prices are ultra premium...

https://www.audioholics.com/editorials/bose-conundrum

Very interesting article. Thanks for posting.
moxxey
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moxxey replied on Wed, Mar 27 2019 11:06 AM

Puncher:

Don't worry, everything is fine and the future nought but shining - I've read it here loads of times!

Indeed.

I don't understand the reason to bring BeoPlay in to Bang & Olufsen and have a single website. BeoPlay was doing fine, the website was simple, effective and easy-to-understand and now they've gone and combined the lot. Isn't as effective. Confusing if anything.

I also notice that the latest SS19 range only covers 3 products/colours. There was a time where the entire BeoPlay range had a lick of paint each season. ie. the H9i has some love, whilst the H8i is neglected, leaving only two primary colour choices.

Jeff
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Jeff replied on Wed, Mar 27 2019 2:21 PM

Puncher:

Don't worry, everything is fine and the future nought but shining - I've read it here loads of times!

All is for the best, in this, the best of all possible worlds!

Jeff

I'm afraid I'm recovering from the BeoVirus. Sad

Emil Jensen
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Jeff:

Puncher:

Don't worry, everything is fine and the future nought but shining - I've read it here loads of times!

All is for the best, in this, the best of all possible worlds!

I bought my stocks in 2009 for the current price they have now.

I sold them when they were twice the price, which I tough was way to much.

I have now bought again, but not because a succes is the only option, I would call it a gamble.

I like their products and defend them often, but the way they have knowledge about their own numbers, surprise me time after time.

They know nothing, just like Jon Snow.

 

I hope for the best, but it is not looking good, start releasing some new product NOW!

Beovision Eclipse, Beolab 20, Beolab 17, Beosound 1 Google assist, Beoplay M3, Beoplay H6

moxxey
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moxxey replied on Wed, Mar 27 2019 3:13 PM

Emil Jensen:

I like their products and defend them often,

Erm, we all like the products (as a whole). That's why we're here. I often think some people have the impression we're just trolls on this board to wind up owners who 'love' the brand, irrespective of the fact we own more B&O products than most - nearly every room has a B&O product in my home.

Just because someone is critical, doesn't mean they dislike the brand and/or products. Some of the decision-making and pricing is very questionable, but I'd have an Eclipse if I could justify the cost. I just can't. However much I try.

PeterBOBP
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moxxey:
Some of the decision-making and pricing is very questionable, but I'd have an Eclipse if I could justify the cost. I just can't. However much I try.

Agreed. The number of times I was totally willing to spend money on a B&O TV but could not justify the costs are countless. There are simply not many people around that are able let alone willing to pay 10k+ for a TV. There are however many that are willing to pay 2 and maybe 3 times the price of a "normal" tv.

I really wonder why it is so difficult to built a good (all in one)  tv with good sound, that looks good, and has one thing apart from the design that stands out (think: motorized stand) and is reasonably priced (of course this is ignorance on my end). 

For me the Beovision Horizon comes close but it should be around 2500 maybe 3000 for the 48inch (3500 - 4000 with a motorized stand if it was available). I would consider a 55 inch eclipse for 6k including stand but not more. 

Imo if they are not able to lower prices, regardless of how great their products are,  sales will decline as will B&O (except maybe Beoplay).

To a certain extend this also goes for audio. One high end show case model, fine; but 2 (BL90 & BL50)?? I would focus more on a combination of usability (integration / great software (including recommendations) / design / integrations with voice assistance and Ok (Beosound 1-2, M5)  to good (BL17, BL18) to great sound (BL18, BL20). For these models the price points are already better than with TVs, should be about 30% lower and  they have still not cracked the software side of things imo. 

Anyway all probably easier said then done from where I am sitting ;-). 

mawheele
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Nothing wrong with products or pricing as they are seeing growth. They have a problem with their channel who are unable and/or unwilling to invest. They need to solve this otherwise growth will stall. They also need to confirm roadmap and commitment to TV business to provide clarity to many on this forum who’ve questioned the future of the business. With that backdrop it’s amazing they are seeing such strong sell through.

With stores closing and margins increasing it is obviously an issue that B&O must own. It tells me they are not investing for growth correctly.
PeterBOBP
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mawheele:
Nothing wrong with products or pricing as they are seeing growth. They have a problem with their channel who are unable and/or unwilling to invest. They need to solve this otherwise growth will stall.

this could be a factor, but they have also adjusted their 3 year targets...(that were lowered already recently). Not sure this is all about uncertainty about the TV business commitment. The problems seem to be more fundamental; there is no one in the "(very) well off middle class" that are spending any money on B&O that I know (and I know a few ;-) ) younger than 50. They like it (and do spend money on luxury / well designed items) but they all think the price gap between B&O and the next viable offering is way too large. There is lots of potential there and hopefully the smart people in Struer can find a way to make use of it. 

Fansastic
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PeterBOBP:

Agreed. The number of times I was totally willing to spend money on a B&O TV but could not justify the costs are countless. There are simply not many people around that are able let alone willing to pay 10k+ for a TV. There are however many that are willing to pay 2 and maybe 3 times the price of a "normal" tv.

I really wonder why it is so difficult to built a good (all in one) tv with good sound, that looks good, and has one thing apart from the design that stands out (think: motorized stand) and is reasonably priced (of course this is ignorance on my end).

For me the Beovision Horizon comes close but it should be around 2500 maybe 3000 for the 48inch (3500 - 4000 with a motorized stand if it was available). I would consider a 55 inch eclipse for 6k including stand but not more.

Imo if they are not able to lower prices, regardless of how great their products are, sales will decline as will B&O (except maybe Beoplay).

To a certain extend this also goes for audio. One high end show case model, fine; but 2 (BL90 & BL50)?? I would focus more on a combination of usability (integration / great software (including recommendations) / design / integrations with voice assistance and Ok (Beosound 1-2, M5) to good (BL17, BL18) to great sound (BL18, BL20). For these models the price points are already better than with TVs, should be about 30% lower and they have still not cracked the software side of things imo.

Anyway all probably easier said then done from where I am sitting ;-).

Completely agree with you on pricing. As much as I love the product range of B&O, the pricing is way to high for what you get.

Personally I’m willing to pay for it to some extent, but no one in my family and friends will follow as potential buyers - just because of pricing! They love the looks and performance, but see the brand as too expensive and turn to Bose or Sonos.

Simply said, reduce pricing by halve and increase sales by four times. Off course It is not that simple but I think that selling LG tv’s four times the price has proven not to work either.
TWG
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TWG replied on Thu, Mar 28 2019 7:00 AM

I bet the CEO and many board members even are wondering how such bad results could happen. 


And what did they do? The typcial pattern that proved to be of no help in about 5000 other cases of tried and failed company turnarounds:

- lay off people

- close down facilites

- cut down costs 

with the result of products and service quality getting even worse... 

So sad to see them constantly damaging our beloved brand!

A few dealers did their best to keep me to the brand even when I was more than unsatisfied with the product quality and reliability. So don't blame the dealers. They have a tough time with their customers due to some bad products. Dealers like Lee are diamonds and should be treated like that.


As a customer I want to be proud again of Bang & Olufsen products. Products that provide the magic aha effect when touching and using it. And not the "Oh, it doesn't work anymore AGAIN!" effect. Wink


And yes, I'm a B&O fan since more than 20 years. :-) 

Martin
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Martin replied on Thu, Mar 28 2019 7:41 AM

Hi,

If we talk about reliability of the products, I can confirm that Beovision Eclipse is 99,9% reliable today.

I am very satisfied with this TV and I think the soundcenter is very good integrated with the LG-screen both regarding "the look" of it and also software-integration between the two units. I had before a Beovision 7-55 mark II and thought that this TV was the "best" TV B&O ever had made. Now I think that Beovision Eclipse really is the best Beovision they ever have made.

Unfortunately I agree that the pricing of the Eclipse is too high.  I think that if the pricing was 30% less, then they should sell alot more of this television. Paying over 125.000 SEK for a television is really crazy. But I have done it and I am a great B&O-fan. But B&O can not just rely on the fan-club.

Best Regards
Martin

Beovision Eclipse 65 with floorstand (from STB Brackets), New! Beolab 50 front, Beolab 3 rear, 2 x Beoplay A6 linkrooms, 2xBeoremote one BT, Beosound 9000 Mark III (sw 3.4), Philips Hue (all lights in the home), Oppo UDP-203, Apple TV 4K

Duels
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Duels replied on Thu, Mar 28 2019 12:51 PM
TWG:

I bet the CEO and many board members even are wondering how such bad results could happen.

And what did they do? The typcial pattern that proved to be of no help in about 5000 other cases of tried and failed company turnarounds:

- lay off people

- close down facilites

- cut down costs

I do get your point.

However, to be fair, lots of struggling businesses have been successfully turned around by reducing costs, laying off people and closing facilities.
Emil Jensen
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The more I think about it,

They have a bad result because the dealers dont stock up, but they are selling to end user.

Okay that may be the case of one quarter but the three year plan?

Either are they lying, or they dont no what is wrong.

I dont know what of these cases I would prefer.

Bad management in my opinion.

Beovision Eclipse, Beolab 20, Beolab 17, Beosound 1 Google assist, Beoplay M3, Beoplay H6

Duels
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Duels replied on Thu, Mar 28 2019 1:47 PM
Having listened to the investor webcast in full, management have said they are reviewing three year targets, but they haven’t said how much they will be revised by. That will come at the end of the financial year.

The full webcast is worth a listen if you have a spare thirty minutes.

Some interesting (to me at least) points:

The low level of new product launches has been deliberate and the coming 12 months will see significantly more product launches across all categories (staged, on the go etc).

The level of unauthorised distribution resulting in discounting and damage to brand/positioning appears to be significant.

TV sales from dealers including older models were up 6%. Sales of just the eclipse and horizon were up 25%.

Very honest assessment from CEO that they had failed to deliver.

A new Chief Technology Officer is about to be appointed.
Emil Jensen
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Thank you Duels,

 

I will have a listen :) 

Beovision Eclipse, Beolab 20, Beolab 17, Beosound 1 Google assist, Beoplay M3, Beoplay H6

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